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It has been an amazing political weekend, even by Israeli standards. First the reported comments of U.S. Ambassador Dan Kurtzer appeared to sabotage Prime Minister Ariel Sharon’s drive to implement the withdrawal from the Gaza Strip and 4 West Bank settlements this summer. But just over 24 hours later, Shinui leader climbed down from a high tree to accept some $160 for Shinui’s political interests; this has saved the new budget, prevented the fall of the government and the end to Sharon’s withdrawal plans, for the time being anyway. U.S. Ambassador Dan Kurtzer also got into the act by reportedly denying Sharon’s claim of a deal with President Bush on Israeli settlements blocs on the West Bank.

The Israeli Cabinet has voted in favor of Prime Minister Ariel Sharon’s plan to withdraw from the Gaza Strip and 4 West Bank settlements. The evacuation is slated to begin on July 20th. Finance Minister Bibi Netanyahu, Sharon’s chief rival in the ruling Likud Party, lead 4 other ministers in voting against the disengagement because it did not include a national referendum on the controversial issue. Previously, the cabinet voted for the withdrawal in principle; today the cabinet decided to implement. Last week, the Knesset also voted for the withdrawal plan and the 1$ billion compensation package. Reacting to the cabinet vote, settler leaders declared they would step up their campaign to block the withdrawal.

After the historic Knesset vote on disengagement, Sharon officials believe the withdrawal from the Gaza Strip and 4 West Bank settlements is now a done deal. The 59-40 vote poured cold water on the campaign by withdrawal opponents for a national referendum, not that they won't l keep trying. Even the vote count is misleading; the number of hard core MKs against the evacuation is even less than 40 in the 120 member Knesset. The MK breakdown: Likud rebels - 17, National Union - 6, National Religious - 6 for a grand total of 29. Sharon sources say: 'Forget about the 11 Shasniks, the ultra-orthodox party will not oppose the withdrawal if it gets what it wants on child allowances.' This 30% is also said to reflect Israeli public opinion after Palestinian President Mahmoud Abbas started halting the terrorism.

The Knesset has passed the evacuation - compensation bill necessary to carry out Israel’s withdrawal from the Gaza Strip and four West Bank settlements this summer. The vote was 59-40 with 5 abstentions. However, as the Prime Minister moves his evacuation plan forward, he may also be facing mounting death threats.

A major confrontation between Prime Minister Sharon and his withdrawal opponents erupted in the Knesset Foreign Affairs and Defense Committee. Sharon said it was clear who was behind the recent wave of incitement by opponents to his withdrawal plan. MK Effi Eitam of the National Religious Party retorted that Sharon was manipulating the incitement for his own political purposes.

In the Gaza Strip, Hamas terrorists have fired dozens of mortars, Qassam rockets and anti-tank missiles at Israeli settlements. There have been no Israeli casualties but one building was hit and the electricity grid was damaged. Hamas says it was reacting to the death of a Palestinian by IDF gunfire. The IDF says troops opened fire when they spotted a group of four Palestinians trying to infiltrate the settlement of Atzmona.

Prime Minister Sharon managed to win a narrow Knesset majority for his new disengagement cabinet, but he is now facing a new crisis. Sharon’s Likud party expresses mounting annoyance over the Prime Minister’s dependence on Arab and Left-wing Yachad Knesset members. It was only with their votes that Sharon gained Knesset approval for his new cabinet with Labor and United Torah Judaism. Sharon has now turned to Shas, another ultra-orthodox party, in order to bring them into the coalition and silence Likud criticism. However, Shas is demanding major changes in the new state budget and a free vote when it comes to the withdrawal.

The government crisis has deepened over Prime Minister Ariel Sharon’s moves to pass the new state budget. After two far right parties bolted the coalition in protest over Sharon’s ‘Gaza+4’ withdrawal plan in Knesset, Sharon has made a budget payoff to the ultra-orthodox United Torah Judaism Party and possibly the NRP for their support in passing the budget this Wednesday. However, in response, the coalition party Shinui warns it will now vote against the budget; if it does Sharon will fire Shinui from the coalition. The government crisis worsens day by day.

After a week or so of wrangling, the ruling Likud party and Labor from the opposition have apparently wrapped up a new national unity government to carry out a withdrawal from the Gaza Strip and 4 West Bank settlements. However, at the same time that Sharon was building a cabinet to approve the evacuation, the Palestinian terrorists were escalating their attacks. The IDF hit back, launching an operation into the Khan Yunis area. Despite the Palestinian escalation, Prime Minister Sharon called on the Palestinians to take advantage of the ‘great opportunity’ for peace after the death of Yasser Arafat. U.S. President George Bush repeated that Israeli-Palestinian peace was at the top of his agenda; however, Syria’s President Bashar Assad would have to get in the waiting line.

After his decisive victory at the Likud convention, Prime Minister Ariel Sharon lost no time in inviting Labor, Shas and United Torah Judaism to join a new government coalition. The dramatic vote reversed an earlier decision three months ago, giving Sharon a 62-38% win. Although Likud cabinet minister Ehud Olmert says the inclusion of Labor will mean the Gaza withdrawal is now ‘in the bag’, MK Zvi Hendel of the National Union warns that Sharon’s brutal withdrawal tactics may trigger a civil war. David Essing has this analysis of what is being as an historic milestone in the country’s history:

Prime Minister Ariel Sharon has won back his Likud party and apparently a new coalition. The door is now wide open, for Sharon to carry out a unilateral Israeli withdrawal from the Gaza Strip and four West Bank settlements.

Throughout the region, the talk today is about the prospect the Middle East may be on the brink of compromise and peace, instead of embroiled in bloodshed and terrorism. The flurry of optimism has been triggered by Egypt’s dramatic release of the Israeli Druze citizen Azam Azam. But there are other moves afoot and David Essing has this analysis of why and where things may be headed.

The government crisis has deepened over Prime Minister Ariel Sharon’s moves to pass the new state budget. After two far right parties bolted the coalition in protest over Sharon’s ‘Gaza+4’ withdrawal plan in Knesset, Sharon has made a budget payoff to the ultra-orthodox United Torah Judaism Party and possibly the NRP for their support in passing the budget this Wednesday. However, in response, the coalition party Shinui warns it will now vote against the budget; if it does Sharon will fire Shinui from the coalition. The government crisis worsens day by day.

The official news that Palestinian leader Yasser Arafat will not be taken off his life-support system was taken in stride by Israel. When Arafat was flown to Paris in serious condition last week, Prime Minister Ariel Sharon instructed his cabinet ministers to clam up, in light of the delicate situation. Jerusalem has been in a ‘wait and see’ mode - not wanting to be accused of intervening in the Palestinians’ internal affairs. The IDF Chief of Staff, Lt. Gen. Moshe Ya’alon did refer to what he called a new Middle East crossroad when he briefed the Knesset Foreign Affairs and Defense Committee.

The Israeli-Palestinian conflict has now entered a new historic juncture. Three roads now intersect; optimists hope it will lead from the current battleground to a new and different landscape; the pessimists feel it will be more of the same.

Israeli officials say they are not surprised by the latest suicide bombing in Tel Aviv despite the fact that Palestinian leader Yasser Arafat has been hospitalized in Paris. Three Israelis, two women and a man were murdered when a Palestinian suicide bomber blew up his explosives in the crowded open air Carmel market of Tel Aviv. More than 30 others were injured, some of them seriously. Prime Minister Ariel Sharon made clear that he holds Palestinian leaders responsible. At a briefing to the Knesset Foreign Affairs and Defense Committee, a senior IDF Intelligence officer spoke of the terrorism continuing despite Arafat’s absence. Although Israel has a lot of details, it is not enough for a diagnosis of the Palestinian leader’s condition.

Where is the ruling Likud Party of Prime Minister Ariel Sharon now headed? The party split down the middle; some Likud MKs voted for Sharon’s withdrawal while others opposed it. In addition, Sharon’s party rival Finance Minister Binyamin Netanyahu and three other cabinet ministers issued an ultimatum, warning they will resign if the Prime Minister does not agree to a national referendum within 2 weeks. Meir Sheetrit another Likud cabinet minister says the cabinet ‘rebels’ backed down in yesterday’s vote and he believes they will again.

However, Likud Cabinet Minister Uzi Landau and Deputy Minister Michael Ratzon now say that 5 more Likud cabinet ministers also oppose the pullout and Sharon’s opponents are now a majority in the Likud Knesset caucus.

Israel’s Parliament, the Knesset, has voted in favor of Prime Minister Ariel Sharon’s disengagement plan to evacuate the Gaza Strip and 4 northern Samaria settlements by the end of next year. However, there was high drama hours before the vote when Binyamin Netanyahu, Sharon’s main rival in the Likud party, served an ultimatum to the Prime Minister; Netanyahu and three other ministers Livnat, Katz and Naveh threatened to resign unless Sharon agreed to hold a national referendum on the evacuation within 14 days. But then in the Knesset vote, the four rebel ministers caused an up-roar when they voted for Sharon’s proposal. Analyst David Essing says Netanyahu has blinked first in what is now an open confrontation with Sharon.

Rabbi Ovadia Yosef’s decision will not block the Knesset passage of Prime Minister Ariel Sharon’s withdrawal plan on Tuesday. However, the 11 Shas votes against the pullout from Gaza and 4 West Bank settlements, has added momentum to Sharon’s opponents. The opponents are now threatening to scuttle the new state budget which will come before the House within two weeks.